The Smarter Web Company raised $21 million through Bitcoin-denominated bonds, a pioneering move in the UK capital markets aimed at enhancing its Bitcoin holdings.
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Innovative fundraising model: The bond offering allows the company to raise capital without diluting share value.
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Backed by Tobam, the bonds are designed to align with long-term investment strategies.
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Market impact: The Smarter Web Company aims to become one of the largest publicly listed firms in the UK.
The Smarter Web Company has successfully raised $21 million through Bitcoin-denominated bonds, a groundbreaking move in UK finance.
What is the Smarter Web Company’s Bitcoin-Denominated Bond?
The Smarter Web Company has launched a Bitcoin-denominated bond, raising $21 million to enhance its capital structure. This innovative bond structure is a first for UK capital markets, allowing the company to leverage its Bitcoin holdings while minimizing share dilution.
How Does the Bond Structure Work?
The bond is convertible into shares at a 5% premium, with a conversion price set at approximately $2.73. If all bonds convert, over 7.7 million new shares will be issued, providing a unique fundraising avenue without immediate dilution.
Frequently Asked Questions
What are the benefits of Bitcoin-denominated bonds?
Bitcoin-denominated bonds offer companies a way to raise capital while minimizing share dilution and aligning with cryptocurrency’s growing market.
How does the repayment structure work?
The repayment amount fluctuates with Bitcoin’s price, allowing the company to manage its capital efficiently while increasing Bitcoin holdings.
Key Takeaways
- Innovative Capital Raising: The Smarter Web Company’s bond offering represents a new approach to fundraising in the UK.
- Strategic Investment: Partnering with Tobam enhances the credibility and potential success of the bond.
- Market Positioning: This move positions the company as a leader in integrating cryptocurrency into traditional finance.
Conclusion
The Smarter Web Company’s $21 million Bitcoin-denominated bond offering marks a significant shift in UK capital markets. By leveraging cryptocurrency, the company aims to enhance its market position while minimizing share dilution, paving the way for future innovations in fundraising.
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The Smarter Web Company has raised $21 million through Bitcoin-denominated bonds, marking a significant development in UK capital markets.
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The bond offering allows the company to raise capital without immediately diluting its share value.
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CEO Andrew Webley emphasized the potential for this structure to open new capital segments.
The Smarter Web Company has successfully raised $21 million through Bitcoin-denominated bonds, a groundbreaking move in UK finance.
Convertible Bond Priced at Premium
The offering was centered around a 12-month bond denominated in Bitcoin (BTC) that is convertible into The Smarter Web Company shares at a 5% premium compared to its Aug. 5 price of $2.60. The resulting conversion price is around $2.73.
If all bonds are converted to stock, The Smarter Web Company will issue just over 7.7 million new shares. Still, if the share price rises by 50% above the conversion price for 10 consecutive trading days, the firm can force a diversion.
If no conversion occurs, the company will repay 98% of the bond principal in Bitcoin at maturity, with repayment adjusted to reflect the BTC price at the time.
A Different Way to Fundraise
Since the bond is priced in Bitcoin, repayment amounts will fluctuate depending on the price of the world’s first cryptocurrency. The offering allowed The Smarter Web Company to raise capital without immediately diluting its share value, while still increasing its Bitcoin holdings.
“The Smarter Web Company achieves a capital raise at a premium based on the Conversion Share Price being higher than the Reference Share Price, resulting in approximately 5% less dilution compared to a traditional equity raise, at the issue date of the bond,” the announcement stated.
The announcement follows The Smarter Web Company adding to its BTC stash throughout July. According to data from BitcoinTreasuries.NET, the firm currently holds 2,050 BTC, worth around $234 million, after its latest buy at the end of last month, adding 225 BTC to its coffers.
The Smarter Web Company Bitcoin holdings chart. Source: BitcoinTreasuries.NET
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